The Raleigh plant manager of Allentown Corp. has noticed the plant frequently changes the schedule on its production line. He has gathered the following information on the activities, estimated times, and average costs required for a single schedule change.

a. Which of these, if any, are value-added activities?
b. What is the cost driver in this situation?
c. How can the cost driver be controlled and the NVA activitieseliminated?

Transcribed Image Text:

Activity Review impact of orders Reschedule orders Reschedule production orders Stop production and change over Return and locate material (excess inventory Generate new production paperwork Change purchasing schedule Collect paperwork from the floor Review new line schedule Est. Time 30min.-2hrs. 15 min.-24hrs. 15min-1hr 10min.-3hrs. Average Cost 300 900 75 150 1,500 500 2,100 75 100 20min.-6hrs. 15 min.-4hrs. 10min.-8hrs 15min. 15 min-30min. 3hrs.-10hrs. Overtime premiums Total 1,000 $6,600